TelexFree: Feds seize $20M in box spring in Westborough

Thursday

Jan 5, 2017 at 8:23 PMJan 6, 2017 at 9:09 AM

By Steven H. Foskett Jr./Telegram & Gazette Staff

BOSTON - Federal agents seized approximately $20 million in cash hidden inside a box spring in Westborough and arrested a Brazilian man late Wednesday as part of the continuing investigation of the massive TelexFree pyramid scheme, according to the office of U.S. Attorney Carmen Ortiz.

Investigators believe the man arrested, 28-year-old Cleber Rene Rizerio Rocha, conspired to launder proceeds of the scheme, which has resulted in a guilty plea in federal court by TelexFree's co-founder and a federal warrant for another co-founder, who allegedly fled to Brazil.

In April 2014 federal agents searched the Marlborough headquarters of TelexFree. Later that day, Carlos Wanzeler, one of the co-founders, allegedly fled to Brazil, where he has remained. Wanzeler and TelexFree co-founder James Merrill were indicted in July 2014 on charges they operated the company, which sold internet telephone service, as a massive pyramid scheme.

The company filed for bankruptcy in April 2014 amid state and federal investigations, and an estimated 1.9 million people worldwide may have participated in it. Investigators say most of the $360 million that TelexFree collected from 2012 to 2014 came from people who paid to promote the business by placing advertisements on websites and recruiting other participants. A bankruptcy judge has declared TelexFree a pyramid and Ponzi scheme. Merrill pleaded guilty to charges in October 2016 and is awaiting sentencing.

Rocha was charged in a criminal complaint with one count of conspiring to commit money laundering. He was detained Thursday after an appearance before U.S. District Court Magistrate Judge Judith G. Dein.

According to the complaint, an intermediary working on Wanzeler's behalf contacted an associate for help transferring millions of dollars of TelexFree money - still hidden in the Greater Boston area - from the United States to Brazil. The associate, who later became a cooperating witness for the government, allegedly arranged with Wanzeler's nephew in Brazil to launder the cash through Hong Kong, convert it to Brazilian reals, and transfer it to Brazilian accounts, the U.S. attorney's office said.

The U.S. attorney's office said Rocha, acting as a courier for Wanzeler’s nephew, flew from Brazil to JFK Airport in New York City a few days ago. Wednesday, Rocha met the cooperating witness at a restaurant in Hudson and allegedly gave him $2.2 million in a suitcase. After the meeting, agents followed Rocha to an apartment complex in Westborough and later arrested him. That night, federal agents searched an apartment at the Westborough complex and seized a massive stockpile of cash hidden in a box spring. The cash appears to total approximately $20 million, according to the U.S. attorney's office.

Rocha faces up to 20 years in prison, according to the U.S. attorney's office. A detention hearing will be held Jan. 11 in Boston, according to the U.S. attorney.

U.S. Attorney Carmen M. Ortiz and Matthew Etre, special agent in charge of Homeland Security investigations in Boston, made the announcement Thursday. Assistant U.S. Attorneys Andrew E. Lelling and Neil J. Gallagher, Jr., of Ms. Ortiz’s Economic Crimes Unit are prosecuting the case.

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